The past month (July 2008) must have been one of the most volatile ever seen by investors; not so much because the stock market overall retracted sharply, but rather the divergence in the performances of the different sectors of the market. For example, the resources sector plunged 19% in July, while the property and financial sectors gained 18% and 13% respectively!
It may well be that commodity prices, at least for now, will be under pressure with the prospects of a slowdown in global economic growth and strengthening US$. But then the rand may also become weaker and thus making those mining and resources shares attractive from a rand hedge perspective. Thus, do not necessarily expect the sharp downturn in resources stock prices to continue!
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